Money, money, money.
To make it, you need it and it’s usually the biggest problem new traders face–building an account large enough to make trading worth it. Sometimes even trying to build an account with no money.
If you’re like me when I started, you’re starting from $0. There are many ways to get money for an account like getting a second job, selling everything you own, taking out a second mortgage, I decided against all of those options, including getting a second job, at least at first. I took a different approach to handling my monthly expenses to help fund my trading account.
First things first, you need a budget.
I know some people hate it, but if you’re going to be out there trading money based on how others manage their money, you should have your own in check regardless of how much you have to put in your trading account.
You need to know what your monthly expenses are and I mean every single penny that will always go out of your account (electric, gas, food etc.) anything that has a known value is great, like a car payment. If you don’t have a set amount that you spend on certain items, average them over the past 3 months and budget for that average.
For example say your electric bill is $175 one month, $125 the next and $150 the month after that. Set your electric bill budget for $150 and keep it there even if your actual bill comes in lower. If your actual bill comes in lower say, $125 and you already set aside $150, then you now have $25 extra you can put towards your trading account. If you do this where ever you can with other bills, you will be surprised how much you can add to the account with the money you are already anticipating paying out.
Over the course of 6 months this can make a massive difference in your contributions to your trading account.
Not only using left over money that you originally had planned to pay bills with is to bake bi-weekly or monthly contributions to your trading account right into what you already budget to spend. Like if you know you’ll have an extra $50 every paycheck left over, put that in your budget and pay it just as you would a bill.
Another good way to get started is to use direct deposit to set-up an automatic transfer to your account every pay day before you even see it. That way a certain amount will always be transferred to your account.
By implementing both of these tactics, in 6 months you have enough to get started. I know 6 months seems like a long time, but doing this the right way won’t happen overnight. Nothing happens overnight, nothing worth having anyway.
Remember if it happens fast it won’t last, if it lasts it won’t be fast. Keep this in mind, we’re working on lasting wealth, and we’re using trading to build that.
If you can only put back $5 this week, that’s $5 more than you had last week.
If you would like to get the template that I use to create a budget